Thursday, September 17, 2009

Cannabis: Is medical marijuana a worthwhile stock market investment?

In recent article published on Cannazine, the differences between the British and the US mindset towards the legalization of Medical Marijuana were observed. The article also looks at several companies that have gone public. One of the companies mentioned, is run by Bruce Perlowin, the King of Pot.

Perlowin's new company Medical Marijuana, Inc., is the first company to go public in this industry (OTC: MJNA). The company offers medical dispensaries and collectives an electronic payment card, which the clients use to buy their cannabis from the dispensary.

This creates a system which the IRS (or even the FBI) can plug into at any time to keep a check on exactly how much trade a dispensary is carrying out, showing the authorities that the dispensary owner wishes to do everything in his power to comply with state laws regarding medical marijuana.

After a slow start it was announced recently that Medical Marijauan Inc. has signed up 5 more dispensaries for a total of 28 to date, in the US and Canada. Like any new idea it takes a little time to catch the imagination. But Medical Marijuana Inc. is well on their way and it would be a foolish person who was to bet against Bruce Perlowin creating another $100 million dollar marijuana business.

Share Price
Following a 1 for 10 forward split of its stock, Medical Marijuana's share price dropped from over $1.00 down to $0.25 cents.

What that means is the company wanted to generate some new stock, and to do so it takes one share worth $1.00 dollar, and turns it into 10 shares worth $0.10 cents each. Generating a whole bunch of new stock, albeit at a lower price. But the value remains in the company all the same.

Over the last 4 months the stock price has fluctuated from a high of almost $0.70 to a low of around $0.28. As we go to press today the price stands at around $0.38 cents, but knowing Bruce Perlowin and his track record this is not a reason to think this stock won't succeed even if it does rollercoaster every now and then.

Summary
Cannabis? Get on it, regardless of what the British government tells us about how dangerous it is. The truth is 25 million American citizens who have legal access to medical marijuana know otherwise, and it can only be a matter of time before the UK comes up with its own version of a national medical cannabis operation. Maybe not this year or next, but its sure to happen, just as sure as politicians will help themselves to public money.

Click on title for full story......

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